UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15582 / December 8, 1997
SECURITIES AND EXCHANGE COMMISSION V. TRINITY GAS CORPORATION AND SIDNEY W.
SERS, Civil Action No.4-97CV-1018Y (N.D. Tex., Fort Worth Division)
The Securities and Exchange Commission today announced it has filed a
civil action against Trinity Gas Corporation ( Trinity USA ) and its
President and Chief Executive Officer, Sidney W. Sers ( Sers ), alleging
violations of the antifraud and securities registration provisions of the
federal securities laws, as well as five additional defendants named solely
for purposes of relief ( Relief Defendants ). The Commission is seeking
temporary and permanent injunctive relief against Trinity USA and Sers, the
appointment of a Temporary Receiver to operate and manage Trinity USA, and
disgorgement of proceeds of securities sales from all defendants, as well
as civil penalties from Trinity USA and Sers.
The Commission's Complaint alleged that, from mid 1996 to the present,
Trinity USA and Sers have violated Sections 5(a), 5(c), and 17(a) of the
Securities Act and Section 10(b) of the Securities Exchange Act, as well as
Rule 10b-5 thereunder, through the fraudulent sale of approximately $11
million of Trinity USA securities to at least 250 investors residing in at
least 13 states. In addition, the Complaint alleges that Sers violated the
same provisions when he sold, on his own behalf and on behalf of the Relief
Defendants, at least $5.8 million of Trinity USA securities by means of the
Bulletin Board trading system of the National Association of Securities
Dealers; and an additional 7.8 million shares through unlicensed salesmen.
According to the Complaint, Trinity USA, a Brownwood, Texas oil and
gas company, and Sers, have misrepresented to investors the financial
condition of Trinity USA; the title to and conditions surrounding certain
oil and gas drilling rights located near Cali, Colombia; the performance of
two exploratory gas wells and the gas reserves claimed to be found at the
drilling location; and efforts of Trinity USA to become a reporting
company. Trinity USA and Sers have failed to disclose, the Complaint
alleges, the actual number of shares of Trinity USA issued and outstanding,
the issuance to Sers and the Relief Defendants of millions of shares of the
company for little, if any, consideration; or the use of at least $1
million of Trinity USA funds for the personal benefit of Sers.
On November 6, 1997, the Commission suspended trading in the
securities of Trinity USA for a single ten day period. Among the
representations made by Trinity USA, alleged in the Complaint to be false
and misleading, is the claim, made in a press release issued on November
14, 1997, that "the company will continue, as it has in the past, to
disclose accurate, material information to shareholders and other
interested parties as soon as it becomes available.
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